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Morgan Keegan & Company and Morgan Asset Management recently agreed to pay $200 million to settle fraud charges related to subprime mortgage-backed securities valuations in their registered funds. Two Morgan Keegan employees also agreed to pay penalties for allegedly causing the false valuation of the securities in five funds that Morgan Asset managed from January to July 2007. This update analyzes the Morgan Keegan case, which the SEC trumpeted as demonstrating its continuing efforts to prosecute companies and individuals associated with the subprime mortgage crisis. We also consider the case’s implications for better understanding the SEC’s views on appropriately “fair valuing” a fund’s portfolio securities.